Microsoft 365 Price Increase 2026: Up to 40% Since 2022, Yet No Plan Has Outpaced Inflation Since Launch

The latest Microsoft 365 price increase took effect on July 1, 2026: Microsoft 365 E3 went from $36 to $39, Office 365 E3 from $23 to $26, Business Standard from $12.50 to $14 and Business Basic from $6 to $7 per user per month. Since February 2022, Business Basic is up 40% and Office 365 E3 30%, against 18.8% CPI inflation.

We rebuilt the commercial price history from Microsoft’s own pages: its launch press release and blogs, licensing news, Partner Center announcements, today’s live plan pages, and Internet Archive captures of Microsoft’s pricing pages back to July 2011. Every price below is tied to a saved copy of the page it came from, and every change is dated. We then set each price against the Bureau of Labor Statistics CPI-U to separate the real change from the sticker change.

The result has two halves. For a decade, Microsoft barely moved its list prices: Office 365 E3 was cut from $24 to $20 in March 2012 and then held at $20 for ten years while consumer prices rose. Since March 2022, Microsoft has raised prices twice in a little over four years, and 6 of the 10 plans in our ledger have now risen faster than inflation over that span.

What changed on July 1, 2026

Microsoft’s licensing news page lists the old and new US list prices for every commercial suite. Prices rose on 18 of the 22 lines and stayed flat on 4 (Office 365 E1, Office 365 E1 (no Teams), Microsoft 365 Business Premium, Microsoft 365 Business Premium (no Teams)). The steepest rise in percentage terms was Microsoft 365 F1 (no Teams) ($1.75 to $2.50, +42.9%). Frontline plans had the largest percentage rises, but they are also the cheapest plans, so the dollar change per seat is under $2. The smallest rise was Microsoft 365 E5 (+5.3%). Microsoft rounds some percentages on its page (it lists Business Basic as 16%; $6 to $7 is 16.7%), so the table recomputes each one from the dollar amounts.

Source: Microsoft Licensing, “Microsoft 365 Pricing and Packaging Updates” (February 16, 2026), and the December 4, 2025 Partner Center announcement. Existing customers see the new prices at their next renewal after July 1, 2026 (Microsoft licensing FAQ, March 24, 2026).

Every Microsoft 365 price change since 2011

The step charts trace ten plans from the first Microsoft-published price we could retrieve to today. Hover over a point for the source. Gaps at the start of a line are honest gaps: Microsoft’s 2013 to 2019 pricing pages loaded prices with JavaScript, so archived copies show no numbers, and we do not fill them from memory or reseller blogs.

Plans are tracked under their current names: Business Basic launched as Office 365 Business Essentials, Business Standard as Office 365 Business Premium, and Business Premium as Microsoft 365 Business; all three were renamed on April 21, 2020 with no price change.

Two changes went the other way. In March 2012 Microsoft cut enterprise prices “by up to 20%” (Office 365 E1 from $10 to $8, E3 from $24 to $20). In early 2021 it cut its frontline plans with no announcement we could find: archived copies of its frontline page show Microsoft 365 F1 falling from $4 to $2.25 between January 19 and February 10, 2021, and F3 from $10 to $8 between February 10 and March 2, 2021. The July 2026 increase took F3 back to $10.

Real vs nominal: has Microsoft 365 outpaced inflation?

It depends entirely on the start date. Measured from each plan’s first published price, none of the 10 plans rose faster than CPI-U: every one is cheaper today in real terms than when we first see its price. Measured from February 2022, the month before Microsoft’s first broad increase, 6 of 10 beat inflation.

Real change = (new price / old price) / (CPI-U now / CPI-U in the start month) minus 1. CPI-U, U.S. city average, all items, not seasonally adjusted (BLS series CUUR0000SA0), latest month Sep 2026 (336.940). Dark bars beat inflation; light bars lagged it.

Business Basic is the plan that tells the story best. It cost $5 from October 2014 until March 2022. It now costs $7, a 40% rise, just under the 41.9% rise in CPI-U since October 2014, so in real terms it costs 1.3% less than at launch. All of that increase came from March 2022 on. Office 365 E3 shows the long-run pattern: $26 today is 8.3% above its $24 launch price in 2011, while consumer prices rose 49.3%, so a seat costs 27% less in 2011 dollars. Microsoft 365 E5 rose least since 2022: +5.3%, a single $3 increase in July 2026.

These are list prices for a fixed plan name. Microsoft has added features over the period (its 2021 announcement called that increase “the first substantive pricing update since we launched Office 365 a decade ago” and said it had added 24 apps and more than 1,400 features), and large customers negotiate discounts, so this is the sticker price trend, not the price any one customer paid.

The Teams unbundling and the no-Teams price gap

On April 1, 2024 Microsoft began selling its suites worldwide without Teams, with Teams Enterprise at $5.25 as a separate licence. Microsoft 365 E3 without Teams was $33.75, so a customer rebuilding E3 from parts paid $39, more than the $36 bundled price. From November 1, 2025, under commitments to the European Commission, Microsoft cut the no-Teams suite prices and raised Teams Enterprise to $8.55; E3 without Teams fell to $27.45, making the two routes cost the same. In July 2026 both rose by $3, to $39 with Teams and $30.45 without.

What it costs a 50-seat client

For an MSP, the useful number is the yearly change per client. The table applies Microsoft’s list prices to 50 seats of each plan. A 50-seat client on Business Standard pays $900 more a year ($7,500 to $8,400); on Business Premium, nothing changes ($13,200). A mixed client with 30 Business Premium, 15 Business Standard and 5 Business Basic seats goes from $10,530 to $10,860 a year, +3.1%, and pays $11,403 if billed monthly.

List prices only. CSP partner margins, promotions, Copilot add-ons and taxes are not included. The 5% monthly-billing uplift applies to new and renewing monthly billing plans for annual subscriptions from April 1, 2025.

What this means for MSPs

1. Renewal dates, not July 1, decide when clients feel it. Microsoft’s FAQ says existing customers see the new prices at their next renewal after July 1, 2026, and multi-year agreements keep current pricing until renewal. Pull every client’s annual term end date and send the new per-seat price before the renewal, not after the invoice.
2. Business Premium is now the cheapest move up. Business Standard rose $1.50 while Business Premium did not move, so the gap fell from $9.50 to $8.00 per user. For clients on Business Standard plus separate security or device-management tools, rerun the comparison at the new prices.
3. Price the monthly-billing premium into quotes. Since April 2025 a client paying monthly on an annual term pays 5% more. At 50 Business Standard seats that is $420 a year; show it as a line item so annual prepayment is a visible choice.
4. Frontline seats moved the most. F1 is +33% since 2022 and F3 went back to $10 (+25% in July 2026). Retail, healthcare and field-service clients with many frontline seats will see the largest percentage change on their bill.
5. Use the long-run numbers carefully. A client who says Microsoft 365 “keeps getting more expensive” is right about the last four years and wrong about the last fifteen. The CSV below lets you show both.

Price is only one input into the platform decision. Our DNS census of Microsoft 365 market share measures which platform businesses actually route mail to, and our MFA statistics and phishing statistics cover the account-security side of the same tenants.

Frequently asked questions

When did the Microsoft 365 price increase take effect?

July 1, 2026. Microsoft announced it on December 4, 2025, and its licensing FAQ says existing customers see the new prices at their next renewal after July 1, 2026, for both annual and monthly billing plans. Before that, the last broad increase took effect March 1, 2022.

How much did Microsoft 365 Business Standard go up?

From $12.50 to $14.00 per user per month on an annual commitment, a 12.0% rise and the first change since the plan launched as Office 365 Business Premium in October 2014. For 50 users that is $900 more a year ($7,500 to $8,400).

Did Microsoft 365 Business Premium go up in 2026?

No. Business Premium stayed at $22.00 per user per month in the July 2026 update; it last rose in March 2022, from $20. Office 365 E1 ($10) and the no-Teams Business Premium ($18.79) were also unchanged.

Why is Microsoft 365 more expensive if I pay monthly?

Since April 1, 2025, monthly billing on an annual subscription costs 5% more than paying for the year up front, per Microsoft’s November 12, 2024 Partner Center announcement. At the new $14 Business Standard price, that is $14.70 per user per month.

Has Microsoft 365 risen faster than inflation?

Since 2022, mostly yes: 6 of the 10 plans we track rose faster than the 18.8% rise in CPI-U from February 2022 to Sep 2026. Over the long run, no: Office 365 E3 is +8.3% since its 2011 launch price of $24, against 49.3% inflation, so it is 27% cheaper in real terms.

How much is Microsoft 365 E3 now?

$39.00 per user per month with Teams, or $30.45 without Teams, from July 1, 2026. Microsoft 365 E5 is $60.00 ($51.45 without Teams). Office 365 E3 is $26.00 ($17.45 without Teams).

Methodology

References

1. Microsoft Licensing, Microsoft 365 Pricing and Packaging Updates (February 16, 2026). Accessed October 2026.
2. Microsoft Licensing, Microsoft 365 Pricing and Packaging Updates FAQ (March 24, 2026). Accessed October 2026.
3. Microsoft 365 Blog, Advancing Microsoft 365: New capabilities and pricing update (December 4, 2025). Accessed October 2026.
4. Microsoft Partner Center announcements, December 2025 (Internet Archive capture). Accessed October 2026.
5. Microsoft 365 Blog, Evolving our productivity offerings to resolve European competition concerns about Teams (September 12, 2025). Accessed October 2026.
6. Microsoft Partner Center announcements, October 2025 (Internet Archive capture). Accessed October 2026.
7. Microsoft Partner Center announcements, November 2024: monthly billing plan price update (Internet Archive capture). Accessed October 2026.
8. Microsoft Licensing, Realigning global licensing for Microsoft 365 (April 1, 2024). Accessed October 2026.
9. Microsoft 365 Blog, New pricing for Microsoft 365 (August 19, 2021). Accessed October 2026.
10. Microsoft 365 Blog, New Microsoft 365 offerings for small and medium-sized businesses (March 30, 2020). Accessed October 2026.
11. Microsoft Licensing, New Microsoft 365 SKU for Frontline Workers (March 19, 2020). Accessed October 2026.
12. Microsoft 365 Blog, Introducing Microsoft 365 (July 10, 2017). Accessed October 2026.
13. Office Blogs, Evolving Office 365 plans for small and midsized businesses (July 9, 2014; Internet Archive capture). Accessed October 2026.
14. Office 365 Blog, New Lower Prices for Office 365 (March 14, 2012; Internet Archive capture). Accessed October 2026.
15. Microsoft News Center, Microsoft Launches Office 365 Globally (June 28, 2011). Accessed October 2026.
16. Microsoft plan and pricing pages as captured by the Internet Archive Wayback Machine, July 2011 to August 2026 (each capture is linked in the ledger table and listed in the CSV), and live Microsoft plan pages for Office 365 E1, Office 365 E3, Microsoft 365 E3, enterprise, frontline and business plans. Accessed October 2026.
17. U.S. Bureau of Labor Statistics, CPI for All Urban Consumers (CPI-U), U.S. city average, all items, series CUUR0000SA0. Accessed October 2026.